1979 (9) TMI 6 - HC - Wealth-tax

Summary

Issues: Assessment of wealth under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 - Whether wealth belonged to the assessee as an individual or as karta of a Hindu undivided family (HUF).

Analysis:
The judgment by the High Court of Rajasthan involved a reference under section 27(3) of the Wealth Tax Act, 1957, regarding the assessment of wealth, including compensation received under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952. The assessee, a jagirdar, had his jagir resumed under the said Act, and the Wealth Tax Officer (WTO) included the compensation in the net wealth of the assessee. The key question was whether this wealth belonged to the assessee as an individual or as karta of an HUF. The assessee claimed that it should be assessed in his status as karta of the HUF.

The assessee initially appealed the WTO's assessment before the Appellate Assistant Commissioner (AAC), who upheld the assessee's claim. However, the WTO appealed to the Tribunal, which partially allowed the appeal and remanded the case to the AAC for further evidence. After a fresh decision by the AAC, it was held that the wealth in question was held by the assessee as karta of the HUF. Subsequently, the Revenue appealed to the Tribunal again, which upheld the AAC's order. The Commissioner of Wealth Tax then sought a reference to the High Court.

The High Court, after considering relevant case law, particularly Thakur Bhairon Singh's case, concluded that the wealth in question belonged to the assessee in his capacity as karta of the HUF. The court noted that the principles established in previous decisions applied to the present case, and there were no distinguishing features to deviate from those principles. As a result, the Tribunal's decision to consider the wealth as belonging to the assessee in his capacity as karta of the HUF was upheld.

In conclusion, the High Court held that the Tribunal was correct in determining that all the wealth of the assessee, including the compensation received under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, belonged to him as the karta of the HUF. The court answered the question accordingly and directed the answer to be returned to the Tribunal, with no order as to costs.